An article Monday incorrectly stated the price BATUS Inc. paid for Marshall Field & Co. BATUS paid $30 in cash per share, compared with an earlier bid for Field by Carter Hawley Hale Stores Inc., which was offering stock valued between $26 and $32.
Hutzler Brothers Co., the prestigious Baltimore department store whose shine has been fading over the past few years, is about to get a shot of glitter and flash from a man who learned his trade from the retailing stars of Neiman-Marcus and Marshall Field & Co.
Angelo R. Arena, who earned a reputation as one of the nation's leading retailers when he turned the two upscale retail stores into prominent national chains, came to Baltimore a month ago, eager to apply some of the same high-class magic to Hutzler's.
"I want to take Hutzler's as high as you can go from a fashion point of view," Arena said in an interview last week, the first he has granted since he joined Hutzler as its president and chief executive officer.
"If we get a good reaction to the better merchandise, Hutzler's could become the Neiman-Marcus of the Baltimore area," Arena added.
In fact, under Arena, Hutzler's star could shine farther than Baltimore, the retailing executive said.
For within the next five years, he hopes to expand the eight-store chain to locations closer to Washington, in such places as Annapolis, Columbia and Painters Mill.
Over the long term, he hopes Hutzler's will become "a major regional business," with stores scattered over a 200-mile radius.
Arena has a special incentive to make Hutzler's financial sheet glitter. In becoming its new chief executive, he has also become a substantial investor and owner in the company. Arena and Chicago investmest banker Edward McCormick Blair have each pumped $500,000 into the company.
In exchange, each received 8,000 shares of a new class of common stock. Blair's investment group also agreed to pay another $500,000 to Hutzler shareholders--mostly family members--for the right to purchase half of the company's existing shares of common stock.
Before expanding, however, Arena said, his first goal is to breathe new life into the 125-year-old retailer which has gone from Baltimore's largest department store to the second largest, behind the Hecht Co.
During the holiday season, Arena plans to test a higher class of merchandise. If customers respond favorably, then he will begin introducing the merchandise on a large scale next year.
At the same time, he said, he planned to redo the stores to present the merchandise "in exciting ways." The largest store--the one in Towson--will become the company's "flagship," while the original flagship--the downtown store--may be completely replaced by a newer, smaller building constructed nearby, Arena said.
These moves should help counter the aggressive competition Hutzler's has been encountering from Hecht,s, Woodward & Lothrop and Bamberger's, a New Jersey subsidiary of R. H. Macy & Co.
Along with the decline in the economy, the competition has had an adverse impact on the company, whose sales have held steady at about $70 million over the past three years.
Hutzler Chairman Alexander Trowbridge said sales didn't increase in spite of the fact that the company opened two new stores--one in Inner Harbor, the other in the White Marsh shopping center north of Baltimore. One reason, Trowbridge said, was that because the Inner Harbor store was off the beaten track, it has taken longer than expected for customers to learn that it was there.
With its stock held closely by the Hutzler family, Hutzler's has declined to reveal exact financial figures.The company has not earned a profit for the past three years, noted Trowbridge, a former Secretary of Commerce,who became a family member when he married the the widow of former president Charles Hutzler two years ago.
This year, with the economy on the rebound, Hutzler's should once again go into the black and perhaps "have its best year ever," Arena predicted.
For Arena, the challenge at Hutzler's will be far different than the job he faced when he left Neiman-Marcus to join Marshall Fields in 1977. At the time, Marshall Fields--with revenues 10 times those of Hutzler's--was the sleepy carriage trade that attracted the oldtime Chicago residents, but no young people. Its Chicago business, as a result, was getting weaker, as competion for the younger buyers heated up from other retailers. Arena immediately set out to bring "sparkle and interest" to Marshall Fields, commented Jean Allard, a Chicago lawyer who served on the company's board before it was taken over by BATUS Inc. in 1982.
"He looked for good overseas imports; took the merchandise out of the glass cupboards and put them on hangars where people could see and touch them, and added a junior department, complete with good loud music, so that young people began coming in."
Yet Arena faced another problem at Fields; just a few days after he joined the company, Carter Hawley Hale Stores Inc.--which owns Neiman-Marcus--made a bid to buy Marshall Fields.
Arena vigorously fought off that bid--which was for $42 a share--and then proceeded to expand Marshall Fields into a nationwide company. He reasoned that under antitrust laws, Carter Hawley Hale would be unable to buy Marshall Fields if it became a large national company.
Yet the expansion was costly to Fields, straining the company's resources and weakening profits.
As a result, the price of Fields' shares dropped substantially--to as low as $13, thereby making the company--with lots of valuable real estate--a good takeover target.
After a bitter takeover battle with New York investor Carl C. Icahn, Marshall Fields agreed in 1982 to a bid by BATUS Inc., the U.S. subsidiary of Britain's BAT Industries, which owns Saks Fifth Avenue, Gimbel Bros., and Brown & Williamson Tobacco Corp.--for a price that was $16.50 under Carter Hawley Hale's $42-per-share bid in 1977.
Shortly after the merger with BATUS, Arena was named vice chairman of the BATUS retailing division, which Chicago observers say was "a move upstairs."
Eager to get back to operating the retail business, Arena jumped at the Hutzler business when the offer was made, said Trowbridge.
With business declining, some shareholders wanted to liquefy assets, Trowbridge said. Instead, Trowbridge, whose full-time job is president of the National Association of Manufacturers, began looking for companies to buy Hutzler's.
Trowbridge approached Arena, thinking that in his new position with BATUS, a deal could be made with the BATUS.
But instead, Trowbridge recalled, "He said 'How about me?' "